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Courts have upheld insurers’ disclaimers on mold, lead, and asbestos claims under comprehensive general liability (CGL) policies, evidencing the importance of maintaining affirmative cover in the emerging environmental insurance marketplace. Removing a CGL mold, lead, or asbestos exclusion is helpful, but insurers may assert a coverage defense and not pay a claim for reasons that have included: failure to meet the burden of proof, failure to trigger coverage, an absolute pollution exclusion, a preexisting condition exclusion, a defective design exclusion, a faulty workmanship exclusion, a business risk exclusion, a known loss or loss in progress, a custody and control exclusion, an owned property exclusion, and late notice. Accordingly, affirmative coverage grants contained in environmental insurance policies are necessary to protect against such losses and maximize recoveries.

A fundamental question reported in hundreds of court decisions and evaluated every day by claims adjusters is whether a constituent that caused injury and damage is a “pollutant.” If yes, the claim will most often not be covered under general liability, professional, property, umbrella, or other policies because of the applicability of a pollution exclusion. Based upon our review of 200 cases, we determined that in 140, or 70 percent of the time, the constituent was considered a “pollutant” and the insurance claim was denied. In order to have insurance for “irritants” or “pollutants,” an insured must obtain specific pollution coverage.

New York's new 107-page brownfields law encourages the redevelopment of contaminated properties in order to increase tax revenues, revitalize communities, create jobs, protect the environment, and preserve open space. The legislation contains significant financial incentives to volunteers and municipalities to investigate, remediate, and redevelop brownfields to promote the reuse of such properties. While the law provides certain liability protection for claims by the State, it retains the “polluter pays” philosophy and contains scary re-opener provisions. This article will provide a brief overview of New York's recently enacted environmental law and explain why the legislation encourages the procurement of environmental insurance to mitigate the risks inherent with brownfield redevelopment projects.